Corporate Income Tax Freedom Day in first week of January | Unions Yeah!

Corporate Income Tax Freedom Day in first week of January

“Corporate tax cut benefits have trickled up, not down while Canadians have paid the price through cuts to public spending. They’ve been a multi-hundred-billion-dollar failure.” — Toby Sanger, Director of Canadians for Tax Fairness

Ottawa (10 Jan. 2020) — A Canadians for Tax Fairness report shows that corporations pay so little in federal and provincial income taxes that the average corporation has earned enough to cover the cost in the first week of January. This year Corporate Income Tax Freedom Day, the date when Canadian corporations could have paid all their federal and provincial corporate income taxes out of their revenues for the year, came on January 7, 2020.

Corporate income taxes 1.75% of operating revenues

Corporate income taxes accounted for an average of just 1.75%—less than a week’s worth—out of their annual operating revenues. The actual effective rate that corporations pay on their taxable income has been cut by more than half, from 40% 25 years ago to less than 20% in recent years.

Most Canadians hurt by cuts to corporate income taxes

“We were promised that corporate tax cuts would lead to more investment, economic growth and jobs. Instead we’ve had declining rates of business investment, sluggish productivity and economic growth, record cash hoarding by corporations, and increased inequality,” said Toby Sanger, Director of Canadians for Tax Fairness.

“Corporate tax cut benefits have trickled up, not down while Canadians have paid the price through cuts to public spending. They’ve been a multi-hundred-billion-dollar failure,” Sanger said.

Reversing corporate income tax cuts and closing loopholes could pay for programs like pharmacare

As the federal and provincial governments prepare their 2020-21 budgets, they should review how costly tax cuts and unfair tax breaks could be better invested in social programs, such as pharmacare and accessible childcare, to improve the quality of life for all Canadians and generate real economic prosperity.

The report, Corporate Income Tax Freedom Day, is available on the Canadians for Tax Fairness website.